TMI Blog2021 (12) TMI 1426X X X X Extracts X X X X X X X X Extracts X X X X ..... nsated the government exchequer by way of payment of interest on the irregularly availed Cenvat credit for the disputed period, it cannot be said that they are liable for reversal of the entire Cenvat credit. Since the credit availed by the department had not been utilized for payment of service tax on the output service and the appellant had paid the interest amount to compensate the Government Revenue for taking of earlier Cenvat credit, the proceedings initiated for denial of the Cenvat benefit and the recovery of the same should not stand for judicial scrutiny. Levy of penalty under Section 78 - HELD THAT:- The ingredients mentioned in the statute namely, fraud, collusion, willful misstatement etc. are absent in the present case. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant had paid service tax under reverse charge mechanism on 6th of the following month and that the entitlement to the credit during some months were available to the appellant on the next month. However, since the appellant had availed the credit without payment of service tax under Reverse Charge Mechanism, the department initiated show-cause proceedings, which culminated into the adjudication order dated 22.06.2017, wherein original authority had confirmed service tax demand of Rs. 40,15,914/- along with interest and also imposed penalties under Section 77 and 78 of the Finance Act, 1994. On appeal, the learned Commissioner (Appeals) vide the impugned order dated 04.10.2018 has upheld the adjudged demands confirmed on the appellant and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the department. Hence, invocation of Section 78 will not hold good for imposition of penalty on the appellant. However, I find that penalty imposed under Section 77 ibid is justified in the circumstances of the present case. Further, the learned Advocate appearing for the appellant also fairly concedes that the case of the appellant is exposed to the penal consequences provided under Section 77 ibid. 4. In view of the foregoing discussions, the impugned order, to the extent it upheld the recovery of Cenvat demand along with interest and imposition of penalty under Section 78 ibid is set aside and appeal to such extent is allowed in favour of the appellant. The impugned order sustains, insofar as it has imposed penalty on the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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